We have set objectives for Growth, Balanced, Conservative and Cash in order to set the appropriate investment strategy for these funds and help monitor their performance. You’ll find more information about the objectives below the tables and in our statement of investment policy and objectives [PDF, 367 KB].
Performance vs. objectives
Returns and objectives for periods ended 30 September 2023 (after tax and fees).
Fund |
Objective (p.a.) |
1 year vs. objective |
3 years vs. objective (p.a.) |
5 years vs. objective (p.a.) |
10 years vs. objective (p.a.) |
|---|---|---|---|---|---|
|
CPI = 5.61% |
CPI = 5.92% |
CPI = 4.13% |
CPI = 2.62% |
||
|
Cash |
90 Day Bank Bill |
0.1% |
0.1% |
0.2% |
0.2% |
|
Conservative |
CPI + 1.50% |
-4.6% |
-7.2% |
-3.8% |
-0.7% |
|
Balanced |
CPI + 3.00% |
-4.0% |
-6.3% |
-3.7% |
0.3% |
|
Growth |
CPI + 3.75% |
-3.0% |
-4.8% |
-3.4% |
1.1% |
Objectives have changed over time. For periods covering multiple objectives, we have used a weighted average objective to calculate relative performance.
Objectives
Growth, Balanced and Conservative
Inflation erodes the value of your investment. The higher the rate of inflation, the higher the return needs to be to maintain the buying power of your savings. This is why the objectives for the three main funds are based on a margin over inflation (as measured by the Consumer Price Index).
The other side of the equation is volatility or risk. The objective for each fund addresses the likelihood of negative returns both in terms of frequency and magnitude.
The timeframe included in each objective applies to the minimum time that an investor may have to invest in the option to achieve the objectives. The more growth-oriented the fund, the longer the timeframe. That’s because returns from growth assets can be expected to be more volatile from year to year than returns from income assets, which tend to be more consistent.
-
Growth is expected to provide a long-term (10 years plus) return after tax and investment expenses of 3.75% p.a. above inflation. There is a reasonably small risk (approximately 1 in 20 years) of a member losing more than 12.5% in any year, with a current likelihood of a negative return of 1 year in every 4.
-
Balanced is expected to provide a long-term (10 years plus) return after tax and investment expenses of 3% p.a. above inflation. There is a reasonably small risk (approximately 1 in 20 years) of a member losing more than 8% in any year, with a current likelihood of a negative return of 1 year in every 4.
-
Conservative is expected to provide a long-term (10 years plus) return after tax and investment expenses of 1.5% p.a. above inflation. There is a reasonably small risk (approximately 1 in 20 years) of a member losing more than 3% in any year, with a current likelihood of a negative return of 1 year in every 6.
Cash
Cash is designed for short-term saving where the main consideration is preserving capital (avoiding a negative return). The objective for this fund is to provide a return broadly in line with that of the S&P/NZX Bank Bills 90-Day Index after tax. There is a low risk of experiencing a loss in any one year. However, returns may not keep up with inflation.
The S&P/NZX Bank Bills 90-Day Index is designed to measure the performance of a portfolio of bank bills. Bank bills are short-term securities issued by banks, maturing over 31 to 90 days.